NB Power may sue over Point Lepreau cost overruns

The Alward government is instructing NB Power to develop a strategy that will recoup some of the $1 billion in cost overruns associated with the Point Lepreau refurbishment project.

NB Power announced last Friday the nuclear reactor had returned to commercial status, three years behind its original schedule.

Now that the nuclear refurbishment project is finally completed, the Progressive Conservative government said in the throne speech on Tuesday it plans to fight to recover some of the funds spent on purchasing power as the nuclear reactor sat idle.

"Your government has indicated all along that it firmly believes it should not have to take responsibility for the cost overruns associated with the project and that it would exhaust all options to secure compensation for the people of New Brunswick," said Lt. Gov. Graydon Nicholas, who read the throne speech.

"With the completion of the project, your government is of the view that NB Power can now evaluate the best options for securing compensation and will urge NB Power to initiate proper recourse."

Alward said a lawsuit against the federal government is a possible option, but he would not commit to a specific strategy on Tuesday.

"We have now said and we are saying to the leadership of NB Power, You need to follow through on whatever options make sense to go forward," Alward told reporters.

"If a lawsuit is something that makes sense, then that should be one of the options that is evaluated."

The former Liberal government had committed to suing the federal government for some of the cost overruns.

Prime Minister Stephen Harper and Finance Minister Jim Flaherty have repeatedly said they would only pay the contractual obligations associated with the refurbishment project.

The refurbishment project was delayed for three years and a major portion of that time was spent dealing with an issue surrounding the calandria tubes.

The tubes flunked air tightness tests after being fused with special inserts designed to hold them in place.

Earlier this month, it was learned that NB Power sought to purchase what it called "Delay in Start-Up Insurance" prior to beginning the nuclear refurbishment project, suggesting it had no expectation of a federal bailout if the job went sour.

The Point Lepreau refurbishment project was the first time that Atomic Energy of Canada Ltd. attempted to rebuild a Candu-6 reactor.

AECL started another refurbishment project in Wolsong, South Korea, after the Point Lepreau refurbishment started. AECL finished the Wolsong refurbishment in 2011.